February 1, 2024
Top 10 Stock British American Tobacco Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: British American Tobacco – Top 10 Stock in FTSE 100 Index
British American Tobacco is listed as a top 10 stock on February 01, 2024 in the market index FTSE 100 because of its high performance in at least one of the Obermatt investment strategies. While only half of the consolidated Obermatt Ranks exhibit above-average performance, the professional market sentiment is positive and it may be a solid investment proposition, especially if a growth recovery is to be expected soon. Based on the Obermatt 360° View of 54 (high 54% performer), Obermatt assesses an overall buy recommendation for British American Tobacco on February 01, 2024.
Snapshot: Obermatt Ranks
| Country | United Kingdom |
| Industry | Tobacco |
| Index | FTSE All Shares, FTSE 100, FTSE 350, Dividends Europe, Employee Focus EU, Diversity Europe, Human Rights, Recycling |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View British American Tobacco Buy
| 360 METRICS | February 1, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 82 |
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| GROWTH | ||||||||
| GROWTH | 17 |
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| SAFETY | ||||||||
| SAFETY | 31 |
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| SENTIMENT | ||||||||
| SENTIMENT | 77 |
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| 360° VIEW | ||||||||
| 360° VIEW | 54 |
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ANALYSIS: With an Obermatt 360° View of 54 (better than 54% compared with alternatives), overall professional sentiment and financial characteristics for the stock British American Tobacco are above average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for British American Tobacco. The consolidated Value Rank has an attractive rank of 82, which means that the share price of British American Tobacco is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 82% of alternative stocks in the same industry. The consolidated Sentiment Rank has a good rank of 77, which means that professional investors are more optimistic about the stock than for 77% of alternative investment opportunities. But the consolidated Growth Rank has a low rank of 17, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. The consolidated Safety Rank has a riskier rank of 31, meaning the company has a riskier financing structure than 69 comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 54, British American Tobacco is better positioned than 54% of all alternative stock investment opportunities based on the Obermatt Method. Half of the consolidated Obermatt Ranks exhibit above-average performance, but the other half are below market levels. The company enjoys a good value (Value Rank of 82) and positive market sentiment in the professional investor community (Sentiment Rank of 77), but growth expectations are below-average (Growth Rank of 17) and the financing structure is on the risky side(Safety Rank of 31). This combination is rather dangerous, because high debt levels (low safety) require growth to finance the debt burden. The current low growth level may be temporary, because professionals are actually optimistic (positive sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. Companies with less growth typically have a lower price than fast-growing competitors. Even though professional investor sentiment is strong, we recommend further evaluating whether the future of British American Tobacco is as challenging as the stock's low price suggests. Since the professional community is optimistic, the stock might just be going through a more challenging phase now, indicating that timing might be good now. ...read more
Sentiment Strategy: Professional Market Sentiment for British American Tobacco very positive
ANALYSIS: With an Obermatt Sentiment Rank of 77 (better than 77% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock British American Tobacco is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for British American Tobacco. Analyst Opinions are at a rank of 64 (better than 64% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. In addition, Analyst Opinions Change has a rank of 50, which means that stock research experts are changing their opinions for the better in recommending investing in the company. In other words, they are getting even more optimistic about investments in British American Tobacco. Finally, the Professional Investors rank is 87, which means that currently, professional investors hold more stock in this company than in 87% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 77 (more positive than 77% compared with investment alternatives), British American Tobacco has a reputation among professional investors that is significantly higher than that of its competitors. Pros tend to favor investing in this company. But there is also a signal for caution. Market Pulse has a rank of 38, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 62% of competitors). This could mean future risks and should make investors careful. Attention to negative news for British American Tobacco is worthwhile because they may be early warning signals. Without those, all other professional signals are encouraging, especially since analysts are getting more optimistic. ...read more
Value Strategy: British American Tobacco Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 82 (better than 82% compared with alternatives) for 2024, British American Tobacco shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for British American Tobacco. Price-to-Profit (also referred to as price to earnings, P/E ratio) is 93 which means that the stock price compared with what market professionals expect for future profits is lower than for 93% of comparable companies, indicating a good value concerning British American Tobacco's profit levels. The same is valid for the expected Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 82, and for Dividend Yield with a Dividend Yield Rank of 100. But, compared with other companies in the same industry, the stock price is higher than average as regards expected revenues; only 83% of all competitors have an even higher stock price as regards to sales revenues (a Price-to-Sales Rank of 17). Profits, the level of invested capital, and dividend policy suggest that this stock is attractively priced. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 82, is a buy recommendation based on British American Tobacco's stock price compared with the company's operational size and dividend yields. Since it is on the expensive side for Price-to-Sales, it may mean that British American Tobacco has pricing power in its distribution market because it can charge higher prices than its competitors. If this is the case, all four value indicators are positive signals for purchasing British American Tobacco shares. ...read more
Growth Strategy: British American Tobacco Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 17 (better than 17% compared with alternatives), British American Tobacco shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, where half of the indicators are below and half above average for British American Tobacco. Profit Growth, with a rank of 64 (better than 64% of its competitors), and Capital Growth, with a rank of 59, are both positive, which is a healthy sign for positive development. But Sales Growth has only a rank of 6, which means that, currently, professionals expect the company to grow less than 94% of its competitors, and Stock Returns are at a rank of 13. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 17, is a sell recommendation for growth and momentum investors. Stock returns that are a thing of the past can be less of a problem. Below-average revenue growth may be caused by divestments of underperforming businesses. If that is the case, then the positive developments of profit and capital growth are signs of a company with growth potential. If these are the reasons, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: British American Tobacco Debt Financing Safety below-average
| SAFETY METRICS | February 1, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 52 |
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| REFINANCING | ||||||||
| REFINANCING | 23 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 39 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 31 |
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ANALYSIS: With an Obermatt Safety Rank of 31 (better than 31% compared with alternatives), the company British American Tobacco has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of British American Tobacco is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for British American Tobacco and the other two below average. Leverage is at a rank of 52 meaning the company has a below-average debt-to-equity ratio. It has less debt than 52% of its competitors.Refinancing is at a rank of 23, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 77% of its competitors. Liquidity is at a rank of 39, meaning that the company generates less profit to service its debt than 61% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 31 (worse than 69% compared with alternatives), British American Tobacco has a financing structure that is riskier than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of British American Tobacco are on the safer side. ...read more
Combined financial peformance: British American Tobacco Below-Average Financial Performance
| COMBINED PERFORMANCE | February 1, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 82 |
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| GROWTH | ||||||||
| GROWTH | 17 |
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| SAFETY | ||||||||
| SAFETY | 39 |
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| COMBINED | ||||||||
| COMBINED | 25 |
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ANALYSIS: With an Obermatt Combined Rank of 25 (worse than 75% compared with investment alternatives), British American Tobacco (Tobacco, United Kingdom) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of British American Tobacco are a good value (attractively priced) with a consolidated Value Rank of 82 (better than 82% of alternatives) but show below-average growth (Growth Rank of 17), and are riskily financed (Safety Rank of 31), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 25, is a hold recommendation based on British American Tobacco's financial characteristics. As the company British American Tobacco's key financial metrics exhibit good value (Obermatt Value Rank of 82) but low growth (Obermatt Growth Rank of 17) and risky financing practices (Obermatt Safety Rank of 31), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 82% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. ...read more
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